SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
(RULE 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
Mellon Optima L/S Strategy Fund, LLC
(Name of Subject Company (Issuer))
Mellon Optima L/S Strategy Fund, LLC
(Name of Filing Person (Offeror))
Limited Liability Company Interests
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Katherine Cain
c/o Mellon Hedge Advisors, LLC
One Boston Place
024-0071
Boston, MA 02108
Telephone: (617) 722-7446
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications
on Behalf of Filing Person)
with copy to:
Christopher P. Harvey, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Telephone: (617) 526-6000
Telecopy: (617) 526-5000
March 20, 2006
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
| Transaction Valuation | Amount of filing fee | |
|---|---|---|
| $10,000,000 (a) | $1,070.00 (b) | |
| Amount Previously Paid: $1,930.79. | Filing party: Mellon Optima L/S Strategy Fund, LLC | |
| Form or Registration No.: Schedule TO-I, Registration No. 005-81011 | Date filed: September 29, 2005 |
Check the appropriate boxes below to designate any transactions to which the statement relates:
Check the following box if the filing is a final amendment reporting the results of the tender offer: o
This Tender Offer Statement on Schedule TO relates to an offer by Mellon Optima L/S Strategy Fund, LLC, a closed-end, non-diversified, management investment company organized as a Delaware limited liability company (the "Fund"), to purchase limited liability company interests (the "Interests") of the Fund. Subject to the conditions set forth in the Offer to Purchase and related Letter of Transmittal (attached as Exhibit B and Exhibit C, respectively), the Fund will purchase up to $10,000,000 in Interests that are tendered and not withdrawn prior to 12:00 midnight, Eastern Time, on April 17, 2006 subject to any extensions of the Offer to Purchase.
The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated herein by reference with respect to Items 1, 2, 4, 6 through 8, and 11 of this Schedule TO.
Item 3. Identity and Background of Filing Person.
(a) The name of the filing person is Mellon Optima L/S Strategy Fund, LLC. The Fund's principal executive office is located at One Boston Place, Boston, MA 02108 and the telephone number is (877) 257-0004. The investment adviser of the Fund is Mellon Hedge Advisors, LLC (the "Adviser"). The principal executive office of the Adviser is located at One Boston Place, Boston, MA 02108 and the telephone number is (877) 257-0004. The Fund's Directors are Samuel C. Fleming, Benjamin M. Friedman, John H. Hewitt, Caleb Loring III and Patrick J. Sheppard. Their address is c/o Mellon Optima L/S Strategy Fund, LLC at One Boston Place, Boston, MA 02108.
Item 5. Past Contracts, Transactions, Negotiations and Agreements
(a)–(d) Not applicable.
(e) Under the Fund's Amended and Restated Limited Liability Company Agreement (the "LLC Agreement"), which was included as an appendix to the Fund's Confidential Memorandum dated February 2006 (as supplemented or amended from time to time, the "Confidential Memorandum"), and as disclosed in the Confidential Memorandum, the Fund's Board of Directors has sole discretion to determine whether the Fund will repurchase Interests from investors from time to time pursuant to written tenders. The Confidential Memorandum also states that the Adviser expects that generally it will recommend to the Directors that the Fund repurchase Interests from investors twice each year. The Fund is not aware of any contract, arrangement, understanding or relationship relating, directly or indirectly, to this Offer (whether or not legally enforceable) between or among: (i) the Fund, the Adviser, any Director of the Fund, or any person controlling the Fund, the Adviser or any Director of the Fund; and (ii) any other person, with respect to Interests. However, the LLC Agreement provides that the Fund will be dissolved if any investor that has submitted a written request, in accordance with the terms of the LLC Agreement, to tender all of such investor's Interests for repurchase by the Fund has not been repurchased within a period of two years of such request.
Item 9. Persons/Assets, Retained, Employed, Compensated or Used.
(a) No persons have been employed, retained or are to be compensated by the Fund to make solicitations or recommendations in connection with the Offer.
(b) Not applicable.
Item 10. Financial Statements.
(a)(1) The Fund commenced operations on May 1, 2005. As of the date of the Offer, the Fund was not required to file, and has not filed, audited financial statements with the Securities and Exchange Commission. Reference is made to the following unaudited financial statement, which the Fund has prepared and furnished to investors pursuant to Rule 30b1-1 under the 1940 Act and filed
with the Securities and Exchange Commission pursuant to Rule 30b2-1 under the 1940 Act, and which is incorporated by reference in its entirety for the purpose of filing this Schedule TO:
Unaudited financial statements for the six month period ended September 30, 2005, previously filed on Form N-CSR on December 9, 2005.
(2) The Fund is not required to and does not file quarterly unaudited financial statements under the Securities Exchange Act of 1934, as amended. The Fund does not have shares, and consequently does not have earnings per share information.
(3) Not applicable.
(4) The Fund does not have shares, and consequently does not have book value per share information.
(b) The Fund's assets will be reduced by the amount of the tendered Interests. Thus, income relative to assets may be affected by the tender offer. The Fund does not have shares and consequently does not have earnings or book value per share information.
| A | Cover Letter to Offer to Purchase and Letter of Transmittal | |
| B | Offer to Purchase | |
| C | Form of Letter of Transmittal. | |
| D | Form of Notice of Withdrawal of Tender. | |
| E | Form of Letter from the Fund to Investors in connection with acceptance of offers of tender. |
Item 13. Information Required by Schedule 13E-3.
Not applicable.
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule TO is true, complete and correct.
| MELLON OPTIMA L/S STRATEGY FUND, LLC | |||
By: | /s/ PATRICK J. SHEPPARD Patrick J. Sheppard, President | ||
Date: March 20, 2006
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| Exhibit Number | Description | |
|---|---|---|
| A | Cover Letter to Offer to Purchase and Letter of Transmittal | |
B | Offer to Purchase | |
C | Form of Letter of Transmittal. | |
D | Form of Notice of Withdrawal of Tender. | |
E | Form of Letter from the Fund to Investors in connection with acceptance of offers of tender. |
Cover Letter to the Offer to Purchase and Letter of Transmittal
[Mellon Optima L/S Strategy Fund, LLC Letterhead]
If you do not want to sell your limited liability company interests At this time, please disregard this notice. This is solely a notification of the Fund's tender offer.
March 20, 2006
Dear Mellon Optima L/S Strategy Fund, LLC Member:
We are writing to inform you of important dates relating to a tender offer by Mellon Optima L/S Strategy Fund, LLC (the "Fund"). If you are not interested in tendering any portion of your limited liability company interests in the Fund ("Interest" or "Interests," as the context requires) at this time, please disregard this notice and take no action.
The tender offer period will begin on March 20, 2006 and will end at 12:00 midnight, Eastern Time, on April 17, 2006. The purpose of the tender offer is to provide liquidity to members that hold Interests. Interests may be presented to the Fund for purchase only by tendering them during one of the Fund's announced tender offers.
Should you wish to tender your Interest or a portion of your Interest for purchase by the Fund during this tender offer period, please complete and return the enclosed Letter of Transmittal in the enclosed postage-paid envelope or by fax so that it arrives no later than April 17, 2006. If you do not wish to tender your Interests, simply disregard this notice. NO ACTION IS REQUIRED IF YOU DO NOT WISH TO TENDER ANY PORTION OF YOUR INTEREST AT THIS TIME.
All tenders of Interests must be received by Mellon Hedge Advisors, LLC, the Fund's investment adviser ("MHA"), either by mail or by fax (if by fax, please deliver an original, executed copy promptly thereafter) in good order by April 17, 2006.
If you have any questions, please refer to the attached Offer to Purchase document, which contains additional important information about the tender offer, or call Anthony J. Mastrocola at MHA at (877) 257-0004.
Sincerely,
Mellon Optima L/S Strategy Fund, LLC
2
OFFER TO PURCHASE
MELLON OPTIMA L/S STRATEGY FUND, LLC
ONE BOSTON PLACE
BOSTON, MA 02108
OFFER TO PURCHASE $10,000,000 IN OUTSTANDING
LIMITED LIABILITY COMPANY INTERESTS AT NET ASSET VALUE
DATED MARCH 20, 2006
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON MONDAY, APRIL 17, 2006,
UNLESS THE OFFER IS EXTENDED
To the Investors of
Mellon Optima L/S Strategy Fund, LLC:
Mellon Optima L/S Strategy Fund, LLC, a closed-end, non-diversified, management investment company organized as a Delaware limited liability company (the "Fund"), is offering to purchase for cash on the terms and conditions set forth in this offer to purchase ("Offer to Purchase") and the related Letter of Transmittal (which together with the Offer to Purchase constitutes the "Offer") up to $10,000,000 in interests in the Fund (the "Interests") or portions thereof pursuant to tenders by investors at a price equal to their estimated net asset value as of June 30, 2006, if the Offer expires on April 17, 2006. If the Fund elects to extend the tender period for any reason, for the purpose of determining the purchase price for tendered Interests, the estimated net asset value of such Interests will be determined at the close of business on the last business day of the month occurring at least 60 days after the date in which the tender offer actually expires. (As used in this Offer, the term "Interest," or "Interests," as the context requires, shall refer to the interests in the Fund and portions thereof representing beneficial interests in the Fund.) This Offer is being made to all investors of the Fund and is not conditioned on any minimum aggregate amount of Interests being tendered, but is subject to certain conditions described below. Interests are not traded on any established trading market and are subject to strict restrictions on transferability pursuant to the Fund's Amended and Restated Limited Liability Company Agreement dated as of April 29, 2005 (the "LLC Agreement").
Investors should realize that the value of the Interests tendered in this Offer likely will change between February 28, 2006 (the last time estimated net asset value was calculated) and March 31, 2006 (the next time estimated net asset value will be calculated) and June 30, 2006, the date on which the value of the Interests tendered to the Fund will be determined for purposes of calculating the purchase price of such Interests. Investors should also note that although the tender offer expires on April 17, 2006, they remain investors in the Fund until June 30, 2006, the date on which the estimated net asset value of their Interests is calculated. The Fund determines the estimated net asset value at the close of business at the end of each fiscal period, based upon information it receives from the managers of the investment funds in which the Fund invests, and may determine the estimated net asset value more frequently. Any tendering investors that wish to obtain the most current estimated net asset value of their Interests on this basis should contact Mellon Hedge Advisors, LLC, the Fund's investment adviser ("MHA" or the "Adviser"), at the telephone number or address set forth below, Monday through Friday, except holidays, during normal business hours of 9:00 a.m. to 5:00 p.m. (Eastern Time).
Investors desiring to tender all or any portion of their Interest in the Fund in accordance with the terms of the Offer should complete and sign the attached Letter of Transmittal (the last page will suffice) and mail or fax it to the Fund in the manner set forth below.
IMPORTANT
Neither the Fund, nor the Adviser, nor any of the Directors makes any recommendation to any investor as to whether to tender or refrain from tendering Interests. Certain affiliates of the Adviser may serve as investment managers to Investors with respect to Interests, and in such capacity may make recommendations to their clients based on the client's individual financial circumstances, but not in any capacity with respect to the Fund. No affiliate of the Adviser otherwise makes any recommendation with respect to this tender offer. Investors (or their investment managers) must make their own decisions whether to tender Interests, and, if so, the portion of their Interests to tender.
Because each investor's investment decision is a personal one, based on its financial circumstances, no person has been authorized by the Fund to make any recommendation on behalf of the Fund as to whether investors should tender Interests pursuant to the Offer. No person has been authorized to give any information or to make any representations in connection with the Offer other than those contained herein or in the Letter of Transmittal. If given or made, such recommendation and such information and representations must not be relied on as having been authorized by the Fund.
This transaction has not been approved or disapproved by the Securities and Exchange Commission nor has the Securities and Exchange Commission or any state securities commission passed on the fairness or merits of such transaction or on the accuracy or adequacy of the information contained in this document. Any representation to the contrary is unlawful.
Questions and requests for assistance and requests for additional copies of the Offer may be directed to the Adviser.
Mellon Hedge Advisors, LLC
One Boston Place
024-0071
Boston, MA 02108
Phone: (877) 257-0004
Fax: (617) 722-7367
Attention: Anthony J. Mastrocola
TABLE OF CONTENTS
| | | Page | ||
|---|---|---|---|---|
| 1 | Background and Purpose of the Offer | 3 | ||
| 2 | Offer to Purchase and Price | 3 | ||
| 3 | Amount of Tender | 3 | ||
| 4 | Procedures for Tenders | 3 | ||
| 5 | Withdrawal Rights | 4 | ||
| 6 | Purchases and Payment | 4 | ||
| 7 | Certain Conditions of the Offer | 4 | ||
| 8 | Certain Information About the Fund | 4 | ||
| 9 | Certain Federal Income Tax Consequences | 5 | ||
| 10 | Treasury Regulations | 5 | ||
| 11 | Miscellaneous | 6 |
2
purchase price of such Interests). The estimated net asset value of your Interests is determined at the close of business at the end of each fiscal period and may be determined more frequently.
The purchase of Interests pursuant to the Offer will have the effect of decreasing the size of the Fund and increasing the proportionate interest in the Fund of investors who do not tender Interests. A reduction in the aggregate assets of the Fund may result in investors who do not tender Interests bearing higher costs to the extent that certain expenses borne by the Fund are relatively fixed and may not decrease if assets decline.
Interests that are tendered to the Fund in connection with this Offer will be retired, although the Fund expects to issue new Interests from time to time in transactions not involving any public offering conducted pursuant to Rule 506 of Regulation D under the Securities Act of 1933, as amended.
3
value, as of March 1, 2006, of an initial capital contribution of $250,000 made as of the dates on which initial investments in the Fund were accepted:
| Month Contribution Made | Unaudited Net Asset Value as of March 1, 2006 | ||
|---|---|---|---|
| May 1, 2005 | $ | 287,211 | |
| June 1, 2005 | $ | 284,129 | |
| July 1, 2005 | $ | 279,346 | |
| August 1, 2005 | $ | 273,004 | |
| September 1, 2005 | $ | 269,676 | |
| October 1, 2005 | $ | 264,661 | |
| November 1, 2005 | $ | 270,725 | |
| December 1, 2005 | $ | 265,287 | |
| January 1, 2006 | $ | 259,576 | |
| February 1, 2006 | $ | 251,525 | |
As of the close of business on February 28, 2006, there was approximately $252,589,000 in capital of the Fund held in Interests (based on the unaudited estimated net asset value of such Interests). Investors may obtain monthly estimated net asset value information, which the Fund calculates based upon the information it receives from the investment managers of the portfolio funds in which the Fund invests, until the expiration of the Offer, by contacting the Adviser at the telephone number or address set forth on page 1, Monday through Friday, except holidays, during normal business hours of 9:00 a.m. to 5:00 p.m. (eastern time). Of course, the estimated value of the Interests tendered by the investors likely will change between February 28, 2006 (the last time estimated net asset value was calculated) and March 31, 2006 (the next time it will be calculated) and June 30, 2006 (when the value of the Interests tendered by investors will be determined for purposes of calculating the purchase price of such Interests) and the time that investors will cease to be investors in the Fund. The Fund has not made and does not expect to make any distributions of gains or income.
If the amount of the Interests that are properly tendered pursuant to the Offer and not withdrawn pursuant to Section 5 below is less than or equal to $10,000,000 (or such greater amount as the Fund may elect to purchase pursuant to the Offer), the Fund will, on the terms and subject to the conditions of the Offer, purchase all of the Interests so tendered unless the Fund elects to cancel or amend the Offer, or postpone acceptance of tenders made pursuant to the Offer, as provided in Section 7 below. If more than $10,000,000 in Interests are duly tendered to the Fund before the expiration of the Offer and not withdrawn pursuant to Section 5 below, the Fund will, in its sole discretion, either (a) accept the additional Interests permitted to be accepted pursuant to Rule 13e-4(f)(1)(ii) under the Securities Exchange Act of 1934, as amended; (b) extend the Offer, if necessary, and increase the amount of Interests that the Fund is offering to purchase to an amount it believes sufficient to accommodate the excess Interests tendered as well as any Interests tendered during the extended Offer; or (c) accept Interests tendered on or before the Expiration
4
Date for payment on a pro rata basis based on the aggregate estimated net asset value of tendered Interests. The Offer may be extended, amended or canceled in various other circumstances described in Section 7 below.Neither the Adviser, nor any of its affiliates, nor any officer or director of the Fund intends to tender any Interests however, certain affiliates of the Adviser may serve as investment managers to Investors with respect to Interests, and in such capacity may tender Interests on behalf of those clients based on such client's individual financial circumstances.
Investors wishing to confirm receipt of a Letter of Transmittal may contact MHA at the address and phone number set forth on page 1. The method of delivery of any documents is at the election and complete risk of the investor tendering an Interest, including, but not limited to, the failure of MHA to receive any Letter of Transmittal or other document. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tenders will be determined by the Fund, in its sole discretion, and such determination shall be final and binding. The Fund reserves the absolute right to reject any or all tenders determined by it not to be in appropriate form or the acceptance of or payment for which would, in the opinion of counsel for the Fund, be unlawful. The Fund also reserves the absolute right to waive any of the conditions of the Offer or any defect in any tender with respect to any particular Interest or any particular investor, and the Fund's interpretation of the terms and conditions of the Offer will be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Fund shall determine. Tenders will not be deemed to have been made until the defects or irregularities have been cured or waived. Neither the Fund nor the Adviser nor Directors of the Fund shall be obligated to give notice of any defects or irregularities in tenders, nor shall any of them incur any liability for failure to give such notice.
5
allocations to capital accounts of the investors required to be made by the LLC Agreement have been made.
Payment for Interests that have been tendered and accepted will consist initially of a promissory note (the "Note"). The Note will entitle the tendering Investor to be paid cash in an aggregate amount equal to 95% of the estimated unaudited net asset value of Interests tendered by the investor and accepted by the Fund, determined as of the Valuation Date (the "Initial Payment"). The Initial Payment will be made by approximately July 31, 2006. The Note will be held for each tendering investor by DPM and will be executed and delivered to DPM within approximately ten days after the Expiration Date and will not be transferable. The Note will also entitle the tendering Investor to be paid a contingent amount equal to the excess, if any, of (a) the net asset value of the Interests tendered by the investor and accepted by the Fund as of the Expiration Date, determined as of the Valuation Date, based on the audited financial statements of the Fund for Fiscal Year Ending March 31, 2007 over (b) the Initial Payment (such amount, the "Contingent Payment"). The Contingent Payment will be made (in the manner set forth below) within approximately ten days after completion of the audit of the financial statements of the Fund for fiscal year ending March 31, 2007, or on such earlier date as the Fund's Directors may determine. It is anticipated that the audit of the Fund's financial statements for fiscal year ending March 31, 2007 will be completed by no later than 60 days after the end of the fiscal year. Any amounts payable under the Note will include interest, if any, earned by the Fund on an amount, deposited by the Fund in a segregated custodial account, equal to 5% of the estimated unaudited net asset value of Interests tendered by the investor and accepted by the Fund.
The Initial and Contingent Payments will be credited directly to the tendering investor's investment management or custody account with Mellon Private Wealth Management ("MPWM"), if such investor has a MPWM investment management or custody account. Payments credited directly to investment management or custody accounts will be subject upon withdrawal from such accounts to any fees that MPWM would customarily assess upon the withdrawal of cash from such investment management or custody account. If such investor does not have a MPWM investment management or custody account, the payments will be sent directly to its mailing address as listed in the Fund's records, unless such investor advises the Fund in writing of a change in its mailing address.
The Fund expects that the purchase price for Interests acquired pursuant to the Offer to Purchase, which will not exceed $10,000,000 (unless the Fund elects, in its sole and absolute discretion, to purchase a greater amount), will be derived from: (1) cash on hand; (2) withdrawal of capital from the investment funds in which the Fund invests; (3) the proceeds of the sale of and/or delivery of securities and portfolio assets held by the Fund; and/or (4) possibly borrowings, as described below. The Fund will segregate, with its custodian, cash or U.S. government securities or other liquid securities equal to the value of the amount estimated to be paid under any Notes as described above. Neither the Fund nor the Adviser nor Directors have determined at this time to borrow funds to purchase Interests in connection with the Offer to Purchase. However, depending on the dollar amount of Interests tendered and prevailing general economic and market conditions, the Fund, in its sole discretion, may decide to seek to borrow money to fund all or a portion of the purchase price. No borrowing facilities have been entered into to date.
6
in the event of such cancellation, not to purchase or pay for any Interests tendered pursuant to the Offer; (b) amend the Offer; or (c) postpone the acceptance of Interests. If the Fund determines to amend the Offer or to postpone the acceptance of Interests tendered, it will, to the extent necessary, extend the period of time during which the Offer is open as provided above and will promptly notify investors.
The Fund may cancel the Offer, amend the Offer or postpone the acceptance of tenders made pursuant to the Offer if: (a) the Fund would not be able to liquidate portfolio securities in a manner that is orderly and consistent with the Fund's investment objectives and policies in order to purchase Interests tendered pursuant to the Offer; (b) there is, in the Directors' judgment, any (i) legal action or proceeding instituted or threatened challenging the Offer or that otherwise would have a material adverse affect on the Fund, (ii) declaration of a banking moratorium by Federal or state authorities or any suspension of payment by banks in the United States or New York State that is material to the Fund, (iii) limitation imposed by Federal or state authorities on the extension of credit by lending institutions, (iv) suspension of trading on any organized exchange or over-the-counter market where the Fund has a material investment, (v) commencement of war, armed hostilities or other international or national calamity directly or indirectly involving the United States that is material to the Fund, (vi) material decrease in the estimated net asset value of the Fund from the estimated net asset value of the Fund as of the commencement of the Offer, or (vii) other event or condition that would have a material adverse effect on the Fund or its investors if Interests tendered pursuant to the Offer were purchased; or (c) the independent Directors of the Fund determine that it is not in the best interest of the Fund to purchase Interests pursuant to the Offer. However, there can be no assurance that the Fund will exercise its right to extend, amend or cancel the Offer or to postpone acceptance of tenders pursuant to the Offer. If conditions qualifying as war or armed hostilities as expressed in Section 7(b)(v) above occur (and, at present, the Fund does not believe these conditions exist), and the Directors waive the Fund's rights under Section 7, they will determine whether such waiver constitutes a material change to the Offer. If they determine that it does, the Offer will remain open for at least five business days following the waiver and investors will be notified of this occurrence.
The Fund does not have any plans or proposals that relate to or would result in: (a) the acquisition by any person of additional Interests (other than the Fund's intention to accept subscriptions for Interests from time to time in the discretion of the Fund) or the disposition of Interests, other than as disclosed in the Confidential Memorandum; (b) an extraordinary transaction, such as a merger, reorganization or liquidation, involving the Fund; (c) any material change in the present distribution policy or indebtedness or capitalization of the Fund; (d) any change in the identity of the Adviser or Directors of the Fund, or in the management of the Fund including, but not limited to, any plans or proposals to change the number or the term of the Directors of the Fund, to fill any existing vacancy for a Director of the Fund or to change any material term of the investment advisory arrangements with the Adviser; (e) a sale or transfer of a material amount of assets of the Fund (other than as the Directors determine may be necessary or appropriate to fund any portion of the purchase price for Interests acquired pursuant to this Offer
7
to Purchase or in connection with the ordinary portfolio transactions of the Fund); (f) any other material change in the Fund's structure or business, including any plans or proposals to make any changes in its fundamental investment policy for which a vote would be required by Section 13 of the 1940 Act; or (g) any changes in the LLC Agreement or other actions that may impede the acquisition of control of the Fund by any person.
Other than the acceptance of subscriptions for Interests on February 1, 2006 and March 1, 2006 there have been, no transactions involving the Interests that were effected during the past 60 days by the Fund, the Adviser of the Fund, the Directors or any person controlling the Fund or controlling the Adviser. Based on February 28, 2006 estimated values, there were no persons that may be deemed to control the Fund, may control a person that controls the Fund and/or may be controlled by a person controlling the Fund, that hold Interests.
An investor who tenders its Interest to the Fund (and whose entire Interest is accepted) for repurchase generally will recognize capital gain or loss to the extent of the difference between the proceeds received by such investor (consisting of the Cash Payment and the principal payment under the Note) and such investor's adjusted tax basis in its Interest. Gain, if any, will be recognized by a tendering investor only as and after the total proceeds received by such investor exceed the investor's adjusted tax basis in its Interest. A loss, if any, may be recognized after the tendering investor has received payment under the Note. This capital gain or loss will be short-term or long-term depending upon the investor's holding period for its Interest at the time the gain or loss is recognized. Treasury Regulations provide that an investor will have a divided (that is, fragmented) holding period for its interest if the investor makes contributions to the Fund at different times. Under the Treasury Regulations, each time the investor makes a contribution to the Fund, the investor will have a new holding period for that portion of its Interest determined by a fraction, the numerator of which is the amount of the contribution and the denominator of which is the investor's capital account immediately after the contribution. Certain cash contributions, if made within one year of a liquidating distribution, can be netted against the distribution. If the investor recognizes capital gain or loss in connection with a complete withdrawal from the Fund, the gain or loss is divided between long-term and short-term capital gain or loss in the same proportions as the holding period of the Interest is divided between the portion of the Interest held for more than one year and the portion of the Interest held for one year or less. Interest on the Notes is taxable to a tendering investor receiving such Notes at the time the Fund becomes entitled to a deduction for the Interest under the Fund's method of accounting. A tendering investor will recognize ordinary income to the extent such investor's allocable share of the Fund's "unrealized receivables" exceeds the investor's share of the basis in such unrealized receivables, as determined pursuant to the Treasury Regulations. For these purposes, accrued but untaxed market discount if any, on debt securities held by the Fund will be treated as an unrealized receivable with respect to the tendering investor. An Investor tendering less than its entire Interest will recognize gain only to the extent that the amount of the distribution exceeds such Investor's adjusted tax basis in its Interest and will not be entitled to any loss.
If an investor recognizes a loss in an amount greater than $250,000 upon the tender of its entire Interest to the Fund for repurchase, the Fund may be required, under Section 734 of the Internal Revenue Code, to reduce the tax basis of its property by the amount of the loss recognized by the tendering investor.
8
Pursuant to the authority granted to it under the LLC Agreement, the Adviser intends to specially allocate items of Fund capital gain (loss), including short-term capital gain (loss), to a withdrawing investor to the extent its liquidating distribution would otherwise be greater than (less than) its adjusted tax basis in its Interest. Such a special allocation of gain may result in the withdrawing investor recognizing capital gain, which may include short-term gain, in the investor's last taxable year in the Fund, thereby potentially reducing the amount of any long-term capital gain that, absent the special allocation, would otherwise have been recognized during the tax year in which the investor receives its liquidating distribution upon withdrawal.
Notwithstanding any other provision or statement in any offering document of the Fund (including the Investor Application Form, the Confidential Memorandum and the LLC Agreement), an investor (and each employee, representative or other agent of the Investor) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Fund, the offering of its interests and this Offer and all materials of any kind (including opinions or other tax analyses) that are provided to the investor relating to such tax treatment and tax structure. For the avoidance of doubt, this authorization is not intended to permit disclosure of the names of, or other identifying information regarding, the participants in the transaction, or of any information or the portion of any materials not relevant to the tax treatment or tax structure of the transaction.
The Fund has filed an Issuer Tender Offer Statement on Schedule TO with the Securities and Exchange Commission, which includes certain information relating to the Offer summarized herein. A free copy of such statement may be obtained from the Fund by contacting MHA at the address and phone number set forth on page 1 or from the Securities and Exchange Commission's internet web site, http://www.sec.gov. For a fee, a copy may be obtained from the public reference office of the Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549.
9
Exhibit C
Form of Letter of Transmittal
LETTER OF TRANSMITTAL
Regarding Interests
In
Mellon Optima L/S Strategy Fund, LLC
Tendered Pursuant to the Offer to Purchase
Dated March 20, 2006
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT, AND THIS LETTER OF TRANSMITTAL MUST BE
RECEIVED BY MELLON HEDGE ADVISORS, LLC EITHER BY MAIL OR BY
FAX BY 12:00 MIDNIGHT, EASTERN TIME, ON
MONDAY, APRIL 17, 2006, UNLESS THE
OFFER IS EXTENDED.
Complete The Last Page Of This Letter Of Transmittal And Fax
Or Mail In The Enclosed Postage-Paid Envelope To:
Mellon Optima L/S Strategy Fund, LLC
c/o Mellon Hedge Advisors, LLC
One Boston Place
024-0071
Boston, MA 02108
Attn: Anthony J. Mastrocola
For additional information:
Phone: (877) 257-0004
Fax: (617) 722-7367
To assure good delivery, please send this Letter of Transmittal
to MHA and not to your Portfolio Manager.
If you do not wish to sell any of your interests, please disregard this Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to Mellon Optima L/S Strategy Fund, LLC, a closed-end, non-diversified, management investment company organized under the laws of the State of Delaware (the "Fund"), the limited liability company interest in the Fund or portion thereof held by the undersigned, described and specified below, on the terms and conditions set forth in the offer to purchase, dated March 20, 2006 ("Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together constituted the "Offer").The tender and this Letter of Transmittal are subject to all the terms and conditions set forth in the Offer to Purchase, including, but not limited to, the absolute right of the Fund to reject any and all tenders determined by it, in its sole discretion, not to be in the appropriate form.
The undersigned hereby sells to the Fund the limited liability company interest in the Fund or portion thereof tendered hereby pursuant to the Offer. The undersigned hereby warrants that the undersigned has full authority to sell the limited liability company interest in the Fund or portion thereof tendered hereby and that the Fund will acquire good title thereto, free and clear of all liens, charges, encumbrances, conditional sales agreements or other obligations relating to the sale thereof, and not subject to any adverse claim, when and to the extent the same are purchased by it. Upon request, the undersigned will execute and deliver any additional documents necessary to complete the sale in accordance with the terms of the Offer.
The undersigned recognizes that under certain circumstances set forth in the Offer, the Fund may not be required to purchase any of the limited liability company interest in the Fund or portions thereof tendered hereby.
The undersigned acknowledges that the method of delivery of any documents is at the election and the complete risk of the undersigned, including, but not limited to, the failure of the Fund's investment adviser, Mellon Hedge Advisors, LLC ("MHA"), to receive any Letter of Transmittal or other document. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Fund shall determine. Tenders will not be deemed to have been made until the defects or irregularities have been cured or waived.
Payment of the Initial and Contingent Payments (as defined in Section 6 of the Offer to Purchase) for the purchase price for the limited liability company interest in the Fund or portion thereof of the undersigned shall be credited directly to the undersigned's investment management or custody account with Mellon Private Wealth Management ("MPWM"), if such investor has a MPWM investment management or custody account. (The undersigned hereby represents and warrants that the undersigned understands that, for cash payments credited directly to the undersigned's investment management or custody account, upon a withdrawal of such cash payment from such account, MPWM will impose such fees as it would customarily assess upon the withdrawal of cash from such investment management or custody account). If such investor does not have a MPWM investment management or custody account, the payment will be sent directly to its mailing address as listed in the Fund's records. A promissory note ("Note") reflecting the Initial and Contingent Payment obligations, as described in Section 6 of the Offer to Purchase, will be held for such investor by the Fund's transfer agent, DPM Mellon, L.L.C., ("DPM"). The undersigned recognizes that the amount of the Initial Payment will be based on the unaudited estimated net asset value as of June 30, 2006, of the limited liability company interest or portion thereof tendered, and that the Contingent Payment portion of the purchase price, if any, will be determined upon completion of the audit of the Fund's financial statements for fiscal year ending March 31, 2007, which is anticipated to be completed not later than 60 days after the Fund's fiscal year end, and will be paid in cash within approximately ten days thereafter, or on such earlier date as the Fund's Directors may determine.
All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and the obligation of the undersigned hereunder shall be binding on the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in Section 5 of the Offer to Purchase, this tender is irrevocable.
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MELLON OPTIMA L/S STRATEGY FUND, LLC
If you do not want to sell your limited liability company interest at this time, please disregard this notice. This is simply notification of the Fund's tender offer. If you choose to tender, you are responsible for confirming that MHA has received your documents by the tender Expiration Date. To assure good delivery, please send this page to MHA and not to your Portfolio Manager. This Letter of Transmittal must be received by MHA either by mail or by fax by 12:00 midnight, Eastern Time, on Monday, April 17, 2006, unless the offer is extended.
| Please fax or mail (this page only) in the enclosed postage-paid envelope to: | ||
Mellon Optima L/S Strategy Fund, LLC c/o Mellon Hedge Advisors, LLC One Boston Place 024-0071 Boston, MA 02108 | ||
Attn: Anthony J. Mastrocola | ||
For additional information: Phone: (877) 257-0004 Fax: (617) 722-7367 |
Part 1. Name:
Name of Investor:
SS# or Taxpayer ID #:
Phone #:
Mellon Private Wealth Management Account # (if applicable) :
Part 2. Amount of Fund Interest in the Fund to be Tendered:
| o | Portion of limited liability company interest expressed as a specific dollar value. $ (minimum $50,000 unless entire interest is being tendered). (Subject to maintenance of a minimum limited liability company interest equal to $50,000 (the "Required Minimum Balance")). Please note, a promissory note will be held on your behalf by DPM Mellon, L.L.C., the Fund's transfer agent (the "Note") entitling you to receive an initial payment of 95% of the estimated unaudited net asset value of your requested amount, determined as of June 30, 2006. The payment shall be credited directly to your MPWM investment management or custody account, if you have a MPWM investment management or custody account by approximately July 31, 2006. If you do not have a MPWM investment management or custody account, the payment will be mailed to you directly at the mailing address listed in the Fund's records. A contingent payment representing the balance of the requested amount, if any, is expected to be paid within approximately ten days after the conclusion of the March 31, 2007 fiscal year-end audit (or earlier, at the Fund's discretion). Any amounts payable under the Note will include interest, if any, earned by the Fund on an amount, deposited by the Fund in a segregated custodial account, equal to 5% of the estimated unaudited net asset value of Interests tendered by the investor and accepted by the Fund.The undersigned understands that if: (a) the undersigned tenders an amount that would cause the undersigned's capital account balance to fall below the Required Minimum Balance, the Fund reserves the right to reduce the amount to be purchased from the undersigned so that the Required Minimum Balance is maintained or (b) the undersigned tenders an amount less than $50,000 (unless the investor is tendering the investor's entire interest having a lower value) the Fund reserves the right to reject the tender. |
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Part 3. Signature(s):
| FOR INDIVIDUAL INVESTORS AND JOINT TENANTS: | ||
Signature: | ||
(Signature of Owner(s) Exactly as Appeared on Investor Application)/Date | ||
Print Name of Investor: | ||
Joint Tenant Signature: (If joint tenants, both must sign.) | ||
(Signature of Owner(s) Exactly as Appeared on Investor Application)/Date | ||
Print Name of Joint Tenant: | ||
FOR OTHER INVESTORS: | ||
Print Name of Investor: | ||
Signature: | ||
(Signature of Owner(s) Exactly as Appeared on Investor Application)/Date | ||
Print Name of Signatory and Title: | ||
Co-Signatory if necessary: | ||
(Signature of Owner(s) Exactly as Appeared on Investor Application)/Date | ||
Print Name and Title of Co-Signatory: | ||
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Exhibit D
Form of Notice of Withdrawal of Tender
NOTICE OF WITHDRAWAL OF TENDER
Regarding Interests In
Mellon Optima L/S Strategy Fund, LLC
Tendered Pursuant to the Offer to Purchase
Dated March 20, 2006
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT, AND THIS LETTER OF TRANSMITTAL MUST BE
RECEIVED BY MELLON HEDGE ADVISORS, LLC EITHER BY MAIL OR BY
FAX BY 12:00 MIDNIGHT, EASTERN TIME, ON
MONDAY APRIL 17, 2006, UNLESS THE
OFFER IS EXTENDED.
Complete This Notice Of Withdrawal And Fax Or Mail To:
Mellon Optima L/S Strategy Fund, LLC
c/o Mellon Hedge Advisors, LLC
One Boston Place
024-0071
Boston, MA 02108
Attn: Anthony J. Mastrocola
For additional information:
Phone: (877) 257-0004
Fax: (617) 722-7367
MELLON OPTIMA L/S STRATEGY FUND, LLC
You are responsible for confirming that this Notice is received by MHA. To assure
good delivery, please send this page to MHA and not to your Portfolio Manager.pqc
Ladies and Gentlemen:
Please withdraw the tender previously submitted by the undersigned in a Letter of Transmittal.
Mellon Private Wealth Management Account # (if applicable) :
| FOR INDIVIDUAL INVESTORS AND JOINT TENANTS: | ||
Signature: | ||
(Signature of Owner(s) Exactly as Appeared on Investor Application)/Date | ||
Print Name of Investor: | ||
Joint Tenant Signature: (If joint tenants, both must sign.) | ||
(Signature of Owner(s) Exactly as Appeared on Investor Application)/Date | ||
Print Name of Joint Tenant: | ||
FOR OTHER INVESTORS: | ||
Print Name of Investor: | ||
Signature: | ||
(Signature of Owner(s) Exactly as Appeared on Investor Application)/Date | ||
Print Name of Signatory and Title: | ||
Co-Signatory if necessary: | ||
(Signature of Owner(s) Exactly as Appeared on Investor Application)/Date | ||
Print Name and Title of Co-Signatory: | ||
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Exhibit E
Form of Letter from the Fund
to Investors in connection with acceptance of offers of tender
Mellon Optima L/S Strategy Fund, LLC
This letter is being sent to you if you tendered any interest in the Fund.
Dear Investor:
Mellon Optima L/S Strategy Fund, LLC (the "Fund") has received and accepted your tender request. Enclosed is a statement showing the breakdown of your capital withdrawal and the manner in which it is being distributed, in accordance with the tender offer.
Because you have tendered and the Fund has accepted your tender, a note is being held on your behalf by DPM Mellon, L.L.C., the Fund's transfer agent (the "Note") entitling you to receive an initial payment of 95% of the estimated unaudited net asset value of your requested amount, determined as of June 30, 2006, in accordance with the terms of the tender offer (the "Initial Payment"). The Initial Payment shall be credited directly to your investment management or custody account with Mellon Private Wealth Management ("MPWM"), if you have a MPWM investment management or custody account by approximately July 31, 2006. If you do not have a MPWM investment management or custody account, the Initial Payment will be mailed to you directly at the mailing address listed in the Fund's records.
The terms of the Note also provide that a contingent payment representing the excess, if any, of: (a) the net asset value as of June 30, 2006 of the Interest so tendered and accepted, as such value may be adjusted based on the audit of the Fund's financial statements as of March 31, 2007, over (b) the Initial Payment. The contingent portion will be paid (subject to audit adjustment) within approximately ten days after the conclusion of the March 31, 2007 fiscal year-end audit, or on such earlier date as the Fund's Directors may determine, according to the terms of the tender offer. We expect the audit to be completed by the end of May 2007. The contingent payment, if any, shall be credited directly to your MPWM investment management or custody account or mailed directly to you if you do not have a MPWM investment management or custody account. Any amounts payable under the Note will include interest, if any, earned by the Fund on an amount, deposited by the Fund in a segregated custodial account, equal to 5% of the estimated unaudited net asset value of Interests tendered by the investor and accepted by the Fund.
Should you have any questions, please feel free to contact the Fund's investment adviser, Mellon Hedge Advisors, LLC, at (877) 257-0004.
Sincerely,
Mellon Optima L/S Strategy Fund, LLC
Enclosure
